NDS (NNDS) 8-K NDS Change In Financial Reporting

Exhibit 99

Media: Margot Field +44 (0)20 8476 8158
IR: Yael Fainaro +44 (0)20 8476 8287

NDS CHANGE IN FINANCIAL REPORTING

London,UK,January19,2005 – NDS Group plc, a News Corporation company, and the leading provider of technology solutions for digital pay-TV, today announced a change in the reporting of its financial information.

By reason of the re-incorporation of News Corporation from Australia to the United States, NDS Group plc no longer qualifies as a foreign private issuer under US securities laws, although it will remain a company incorporated in the United Kingdom, with its headquarters in the UK and retain its secondary listing on the Euronext exchange. As a consequence, NDS Group plc is required to change the reporting of its financial information from UK accounting practice (“UK GAAP”) to accounting principles generally accepted in the United States (“US GAAP”) and adopt the US dollar as its reporting currency. Moreover, NDS Group plc is required to present quarterly and annual financial information on Form 10-Q and Form 10-K, respectively.

The attached schedules contain selected unaudited financial information for the fiscal years ended June 30, 2003 and June 30, 2004 and the quarter ended September 30, 2004, re-presented in accordance with US GAAP and in US dollars.

NDS expects to publish its results for the quarter ended December 31, 2004 on February 1, 2005.

NDS Group plc (NASDAQ/Euronext Brussels:NNDS) is a leading supplier of open end-to-end digital pay TV solutions for the secure delivery of entertainment and information to television set-top boxes and IP devices. See www.nds.com for more information about NDS.

Cautionary Statement Concerning Forward-looking Statements

Thestatementscontainedinthisreleasewhicharenothistoricalfactsmay constituteforward-lookingstatementswithinthemeaningoftheU.S.Private SecuritiesLitigationReformActof1995.Thesestatementsrelatetotheplans, projectionsorfutureperformanceofNDS,whichinvolvecertainrisksand uncertainties,includingriskofmarketacceptance,theeffectofeconomic conditions,possibleregulatorychanges,technologicaldevelopments,theimpact ofcompetitivepricingandtheabilityofNDSanditscommercialpartnersto developsystemsandsolutionswhichmeettheneedsofthebroadcastingindustry inatimelyandcost-efficientmanner,aswellascertainotherrisksand uncertaintieswhicharedetailedinNDS’sfilingswiththeSEC.Companyor productnameshavebeenusedforidentificationpurposesonlyandmaybethe trademarksorregisteredtrademarksoftheirrespectivecompanies.

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NDS Group plc
Unaudited Consolidated Income Statements

	Year ended		Year ended		3 months ended		3 months ended
	June 30, 2004		June 30, 2003		September 30,		September 30,
	$‘000		$‘000		$‘000		$‘000
Revenue
Conditional access	178,286		260,709		90,324		45,780
Integration, development & support	55,601		52,716		16,808		15,593
License fees & royalties	51,673		35,299		16,000		6,987
New technologies	64,942		51,474		16,970		11,134
Other	6,161		7,152		1,177		1,457
Total revenue	356,663		407,350		141,279		80,951
Cost of goods and services sold
Smart card costs	(26,708	)	(122,596	)	(38,799	)	(6,411	)
Operations & support	(47,708	)	(33,526	)	(15,553	)	(10,015	)
Royalties	(7,160	)	(7,144	)	(3,075	)	(1,217	)
Other	(2,811	)	(8,559	)	(140	)	(647	)
Total cost of goods and services sold	(84,387	)	(171,825	)	(57,567	)	(18,290	)
Gross profit	272,276		235,525		83,712		62,661
Operating expenses
Sales & marketing	(25,145	)	(22,537	)	(6,066	)	(6,004	)
Research & development	(146,190	)	(99,764	)	(38,321	)	(28,305	)
General & administration	(34,140	)	(34,912	)	(12,102	)	(8,667	)
Foreign exchange gains	1,192		1,256		1,162		580
Amortization of intangibles	(8,177	)	(3,000	)	(3,101	)	(778	)
Impairment charge	(11,391	)	—		—		—
Loss on investments	(446	)	(738	)	—		—
Total Operating Expenses	(224,297	)	(159,695	)	(58,428	)	(43,174	)
Operating income	47,979		75,830		25,284		19,487
Other expense	—		(444	)	—		—
Interest	7,294		4,579		1,990		2,071
Income before income tax expense and
minority interests in subsidiaries, net of tax	55,273		79,965		27,274		21,558
Income tax expense	(19,061	)	(23,883	)	(9,657	)	(7,262	)
Minority interests in subsidiaries, net of tax	843		161		—		93
Net Income	37,055		56,243		17,617		14,389
Net income per share
Basic net income per share	$0.69		$1.04		$0.32		$0.27
Diluted net income per share	$0.67		$1.04		$0.31		$0.26

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NDS Group plc
Quarterly Unaudited Consolidated Income Statements
Year ended June 30, 2004

									Year ended
	1st Quarter		2nd Quarter		3rd Quarter		4th Quarter		June 30, 2004
	$‘000		$‘000		$‘000		$‘000		$‘000
Revenue
Conditional access	45,780		41,478		35,677		55,351		178,286
Integration, development & support	15,593		11,458		16,181		12,369		55,601
License fees & royalties	6,987		7,770		24,277		12,639		51,673
New technologies	11,134		13,915		20,685		19,208		64,942
Other	1,457		1,867		1,116		1,721		6,161
Total revenue	80,951		76,488		97,936		101,288		356,663
Cost of goods and services sold
Smart card costs	(6,411	)	(4,288	)	(5,242	)	(10,767	)	(26,708	)
Operations & support	(10,015	)	(11,194	)	(12,664	)	(13,835	)	(47,708	)
Royalties	(1,217	)	(1,359	)	(3,032	)	(1,552	)	(7,160	)
Other	(647	)	(2,077	)	246		(333	)	(2,811	)
Total cost of goods and services sold	(18,290	)	(18,918	)	(20,692	)	(26,487	)	(84,387	)
Gross profit	62,661		57,570		77,244		74,801		272,276
Operating Expenses
Sales & marketing	(6,004	)	(6,094	)	(6,800	)	(6,247	)	(25,145	)
Research & development	(28,305	)	(32,271	)	(41,632	)	(43,982	)	(146,190	)
General & administration	(8,667	)	(8,466	)	(8,221	)	(8,786	)	(34,140	)
Foreign exchange gains (losses)	580		3,219		(437	)	(2,170	)	1,192
Amortization of intangibles	(778	)	(1,161	)	(2,981	)	(3,257	)	(8,177	)
Impairment charge	—		—		—		(11,391	)	(11,391	)
Loss on investments	—		—		—		(446	)	(446	)
Total operating expenses	(43,174	)	(44,773	)	(60,071	)	(76,279	)	(224,297	)
Operating income	19,487		12,797		17,173		(1,478	)	47,979
Interest	2,071		1,671		1,762		1,790		7,294
Income before income tax expense and minority interests in subsidiaries, net of tax	21,558		14,468		18,935		312		55,273
Income tax expense	(7,262	)	(4,149	)	(6,639	)	(1,011	)	(19,061	)
Minority interests in subsidiaries, net of tax	93		—		—		750		843
Net Income	14,389		10,319		12,296		51		37,055
Net income per share
Basic net income per share	$0.27		$0.19		$0.23		$0.00		$0.69
Diluted net income per share	$0.26		$0.19		$0.22		$0.00		$0.67

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NDS Group plc
Unaudited Consolidated Balance Sheets

	September 30, 2004		June 30, 2004
	$‘000		$000
ASSETS
Current assets
Cash and cash equivalents	221,102		228,620
Investments	912		757
Accounts receivable	103,037		84,295
Accrued income	16,557		21,845
Prepaid expenses	15,816		15,843
Other current assets	5,579		6,079
Inventories	34,699		35,972
Total current assets	397,702		393,411
Non-current assets
Plant, property & equipment, net	29,640		29,472
Intangibles, net	57,761		61,681
Goodwill	65,266		66,296
Other non-current assets	17,941		17,146
Deferred tax assets	9,968		9,153
Total non-current assets	180,576		183,748
Total assets	578,278		577,159
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Accounts payable	16,417		48,445
Due to related parties	4,702		3,107
Customer deposits & deferred income	107,494		97,864
Accrued expenses	34,554		39,802
Income tax liabilities	14,164		6,812
Other current liabilities	17,948		15,393
Total current liabilities	195,279		211,423
Non-current liabilities
Accrued expenses	33,278		32,392
Shareholders’ equity
Series A ordinary shares at par value	123		122
Series B ordinary shares at par value	420		420
Deferred shares at par value	64,103		64,103
Additional paid-in capital	269,831		266,521
Capital contribution	212,078		212,078
Accumulated deficit and other comprehensive income	(196,834	)	(209,900	)
Total shareholders’ equity	349,721		333,344
Total liabilities and shareholders’ equity	578,278		577,159

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NDS Group plc
Unaudited Consolidated Statements of Cash Flows

	Year ended		Year ended		3 months ended		3 months ended
	June 30, 2004		June 30, 2003		September 30, 2004		September 30, 2003
	$‘000		$‘000		$‘000		$‘000
Operating activities:
Net income	37,055		56,243		17,617		14,389
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation	13,526		11,795		3,394		2,967
Amortization of intangibles	8,177		3,000		3,101		778
Impairment charge	11,391		—		—		—
Share-based compensation	4,743		3,946		2,531		1,826
Loss on investments	446		738		—		—
Other	—		444		—		—
Minority interest in subsidiaries, net of tax	(843	)	(162	)	—		(93	)
Change in operating assets and liabilities,
net of acquisitions	17,164		(22,708	)	(28,445	)	(21,823	)
Net cash provided (used) by operating activities	91,659		53,296		(1,802	)	(1,956	)
Investing activities:
Acquisition of property, plant and equipment	(17,206	)	(9,753	)	(3,694	)	(1,990	)
Proceeds from sale of investments	—		3,437		—		—
Business acquisitions	(75,936	)	(7,703	)	—		—
Cash balances of acquired business	10,292		—		—		—
Cash balances of disposed subsidiary	(870	)	—		—		—
Net cash used in investing activities	(83,720	)	(14,019	)	(3,694	)	(1,990	)
Financing activities:
Proceeds from issuance of shares	2,212		—		780		616
Equity finance provided by minority interests	—		254		—		—
Loan finance provided by minority interests	40		581		—		—
Net cash provided by (used in) financing activies	2,252		835		780		616
Net increase (decrease) in cash and cash equivalents	10,191		40,112		(4,716	)	(3,330	)
Cash and cash equivalents, beginning of period	202,185		150,846		228,620		202,185
Exchange movement of opening cash balance	16,244		11,227		(2,802	)	(16	)
Cash and cash equivalents, end of period	228,620		202,185		221,102		198,839

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NDS Group plc
Unaudited Quarterly Consolidated Statements of Cash Flows
Year ended June 30, 2004

									Year ended
	1st Quarter		2nd Quarter		3rd Quarter		4th Quarter		June 30, 2004
	$‘000		$‘000		$‘000		$‘000		$‘000
Operating activities:
Net income	14,389		10,319		12,296		51		37,055
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation	2,967		2,769		4,678		3,112		13,526
Amortization of intangibles	778		1,161		2,981		3,257		8,177
Impairment charge	—		—		—		11,391		11,391
Share-based compensation	1,826		1,420		1,039		458		4,743
Loss on investments	—		—		—		446		446
Minority interest in subsidiaries, net of tax	(93	)	—		—		(750	)	(843	)
Change in operating assets and liabilities, net of acquisitions	(21,823	)	25,726		(8,957	)	22,218		17,164
Net cash provided (used) by operating activities	(1,956	)	41,395		12,037		40,183		91,659
Investing activities:
Acquisition of property, plant and equipment	(1,990	)	(1,349	)	(3,869	)	(9,998	)	(17,206	)
Business acquisitions	—		(75,767	)	(166	)	(3	)	(75,936	)
Cash balances of acquired business	—		10,292		—		—		10,292
Cash balances of disposed subsidiary	—		—		—		(870	)	(870	)
Net cash used in investing activities	(1,990	)	(66,824	)	(4,035	)	(10,871	)	(83,720	)
Financing activities:
Proceeds from issuance of shares	616		214		1,151		231		2,212
Loan finance provided by minority interests	—		40		—		—		40
Net cash provided by (used in) financing activities	616		254		1,151		231		2,252
Net increase (decrease) in cash and cash equivalents	(3,330	)	(25,175	)	9,153		29,543		10,191
Cash and cash equivalents, beginning of period	202,185		198,839		184,881		197,874		202,185
Exchange movement of opening cash balance	(16	)	11,217		3,840		1,203		16,244
Cash and cash equivalents, end of period	198,839		184,881		197,874		228,620		228,620

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Basis of preparation

The selected financial information provided herein is calculated in accordance with accounting principles generally accepted in the United States (“US GAAP”) and is presented in US Dollars. NDS Group plc has previously published financial information provided in accordance with UK accounting practice (“UK GAAP”) in pounds sterling. The selected financial information has been derived from previously published UK GAAP financial information by adjusting for differences between UK GAAP and US GAAP and then translating the information into US Dollars.

The principle differences between UK GAAP and US GAAP are explained in Note 31 to our consolidated financial statements for the year ended June 30, 2004 included within our Annual Report on Form 20-F which was filed with the Securities and Exchange Commission on October 22, 2004.

In translating the selected financial information from pounds sterling into US Dollars, revenue, expenses and cash flows have been translated at the average exchange rate for the period. Assets and liabilities have been translated at the exchange rate prevailing at the end of the period. Share capital has been translated at the rates prevailing when the relevant shares were issued.

The exchange rates used were as follows:

	Average exchange	Period end
	rate for period	exchange rate
	£1 = US$1	£1 = US$1
3 months ended September 30, 2003	1.6117	1.6613
3 months ended December 31, 2003	1.7051	1.7644
3 months ended March 31, 2004	1.8354	1.8112
3 months ended June 30, 2004	1.8102	1.8277
Year ended June 30, 2004	1.7449	1.8277
Year ended June 30,2003	1.5862	1.6638
3 months ended September 30, 2004	1.8135	1.7993

This selected financial information is unaudited.

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